Singapore office vacancy rate drops to 2.4% in Q1

Meanwhile, rents posted the fastest quarterly growth in four years.

Prime office rents in Singapore’s Core CBD recorded their strongest quarterly growth in nearly four years in Q1 2026 as limited availability of large floorplates pushed occupiers toward newer premium assets, according to Colliers.

Colliers’ Q1 2026 Office Market Insights report showed Core CBD Premium and Grade A office rents rose 1.5% quarter-on-quarter to S$12.00 per sq ft, marking the sharpest quarterly increase since Q2 2022.

Vacancy rates declined to 2.4% from 4.0% in Q4 2025 as net absorption remained strong at around 330,000 sq ft. Colliers said occupiers prioritising speed-to-occupy requirements were increasingly favouring buildings with modern specifications and efficient floorplates, supporting healthy take-up in recently completed developments.

Bastiaan van Beijsterveldt, managing director of Colliers Singapore, said demand remained robust while supply continued to lag, with competition intensifying for prime office space as vacancy tightens.

The consultancy noted that the near-term supply pipeline remains limited, with Newport Tower, expected in 2027, currently the only upcoming CBD Grade A office completion.

Colliers said occupier demand remained broad-based, led by artificial intelligence firms establishing regional hubs and expanding operations in Singapore. Fintech companies, insurers and flexible workspace providers also continued to support leasing demand, particularly in new prime developments catering to enterprise occupiers.

Investment pricing remained resilient during the quarter, with average Core CBD Premium and Grade A capital values holding steady at S$3,100 per sq ft while net yields edged up to 3.66%.

Outside the prime office segment, investment activity remained selective and value-driven. Colliers highlighted the reported acquisition of 78 Shenton Way for between S$600 million and S$630 million, with no current redevelopment plans for the 99-year leasehold asset, which has 56 years remaining. Meanwhile, 158 Cecil Street was reportedly sold for S$175 million, around 27% below its 2015 transaction price of S$240 million.

Catherine He, head of research at Colliers Singapore, said a thin supply pipeline and strong occupier take-up continue to favour newer office stock, with differentiation increasingly driven by floorplate efficiency, amenities and project delivery timing.

Looking ahead, Colliers expects rental growth to persist but become more selective, concentrated in premium and well-located Grade A buildings. The consultancy added that limited availability of large contiguous office space is likely to accelerate pre-commitments in upcoming projects, while secondary assets may increasingly rely on value-add strategies to remain competitive.